Jersey Central Power & Light Co. v. Local Unions 327

decided as amended february 14 1975.: January 30, 1975.

JERSEY CENTRAL POWER & LIGHT CO., APPELLEE,v.LOCAL UNIONS 327, 749, 1289, 1298, 1303, 1309 AND 1314 OF THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, THE UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, THE UNITED STATES OFFICE OF FEDERAL CONTRACT COMPLIANCE, THE UNITED STATES GENERAL SERVICES ADMINISTRATION, AND THE NEW JERSEY DIVISION ON CIVIL RIGHTS, DEPARTMENT OF LAW AND PUBLIC SAFETY. LOCAL UNIONS 327, 749, 1289, 1298, 1303, 1309, AND 1314 OF THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, APPELLANTS

APPEAL FROM THE ORDER OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY Civil Action No. 74-1083.

This case presents to us, in an unusual procedural context, the difficult question of determining which of two allegedly conflicting contracts is to dictate the plaintiff employer's course of conduct. We must resolve whether in reducing a company's work force an employer is obligated to adhere to collective bargaining agreement provisions requiring layoffs in reverse order of seniority, or whether the employer is obligated to implement the provisions of a conciliation agreement made with the Equal Employment Opportunity Commission (EEOC) to retain among its employees a larger proportion of minority group and female workers. It is agreed among the parties that layoffs in reverse order of seniority will have a disproportionate effect upon minority group and female workers, as they are the most recently hired employees. Despite this consequence, we reverse the judgment of the district court and hold that the provisions of the collective bargaining agreement must govern in this procedural context.

I. A. PROCEDURAL HISTORY

On July 18, 1974, Jersey Central Power & Light Company ("Company"), the employer, brought the instant action pursuant to 28 U.S.C. §§ 2201, 2202*fn1 in the District Court for the District of New Jersey. The Company sought a judgment declaring its rights and obligations under: (1) a collective bargaining agreement between the Company and the Unions,*fn2 and (2) a conciliation agreement among the EEOC, the Company and the Unions.*fn3 Named as defendants in the action for declaratory judgment were the Unions, the EEOC, the United States Office of Federal Contract Compliance (OFCC), the United States General Services Administration (GSA), and the New Jersey Division of Civil Rights.*fn4 The Company presented itself in this litigation as a "neutral" party, taking no position as to which of the two contracts must govern the manner by which a substantial cutback in employment would be effectuated.*fn5 In this posture, the Company sought guidance from the district court, asserting that economic circumstances required it to lay off substantial numbers of employees. The Company alleged that it could not determine the specific individuals to be affected until the court declared which of the two agreements was to govern the layoff procedure.

Contending that it faced multiple suits for back pay, irreparable injury to itself and to the public, and severe financial inroads on its resources, on August 23, 1974, the Company moved for an order requiring the defendants to show cause why summary judgment should not be granted "declaring the respective rights of the parties and whether plaintiff [the Company] violated its collective bargaining agreement with [the Union] defendants . . . and the Conciliation Agreement entered into on December 3, 1973 by the layoff . . . of [designated] employees. . . ."*fn6

On September 5, 1974, the return date of the order to show cause, defendants GSA and OFCC moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12 for failure of the complaint to state a claim upon which relief could be granted and for lack of subject matter jurisdiction in the federal district court. Defendant EEOC, in turn, did not contest the district court's jurisdiction but instead opposed the Company's motion on the grounds that summary judgment could not be granted because material facts were in dispute.*fn7 After the submission of briefs and affidavits, the district court held a hearing on motions of the Company and GSA and OFCC, at the conclusion of which the court rendered an oral opinion.*fn8 The district court denied the motion to dismiss brought by GSA and OFCC*fn9 and granted partial summary judgment, requiring the Company to lay off employees in a manner inconsistent with the collective bargaining agreement to avoid a reduction in the percentage of females and minority group members in the work force. As such, the district court rejected the Unions' contentions that the collective bargaining provisions (layoff by reverse order of seniority) were to control without modification.

In particular, the district court's order required that: (1) the seniority provisions of the collective bargaining agreement could not be construed in such a manner as to frustrate the purpose of the conciliation agreement (to wit: that at the end of five years females and minority group members would constitute a proportion of the Company's work force which would approximate the proportion of those groups in the relevant labor market);*fn10 (2) the provisions of the conciliation agreement were to prevail over the provisions of the collective bargaining agreement to the extent that the two agreements were in conflict; and (3) layoffs were to be accomplished in such a manner so that upon completion, the minority group and female worker ratios would be the same as those existing as of July 27, 1974, (approximately one month prior to the commencement of layoffs).

The district court granted leave to file an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). Pursuant thereto the defendant Unions applied for leave to appeal and a panel of this Court granted such leave*fn10a on October 9, 1974, at the same time staying the district court's order and expediting appeal.*fn11 Prior to the hearing on November 15, 1974, defendant-appellee EEOC moved to vacate the October 9, 1974 stay. That motion was denied.*fn12

The Company is a large public utility operating in New Jersey and engaged in the generation and distribution of electrical power throughout approximately half of that State. As of June 29, 1974, the Company employed 3,859 employees, of whom 2,877 were in the bargaining units represented by the Unions involved in the instant proceeding.

On January 28, 1972, a charge had been filed with the EEOC alleging that the Company and the Unions unlawfully discriminated against women and "minority group persons,"*fn14 in violation of Title VII of the Civil Rights Act of 1964. The EEOC investigated the charge and found*fn15 reasonable cause to believe that the Company discriminated against minority group persons and females with respect to hiring and job assignments.*fn16 Thereafter, a conciliation agreement was entered into among the Company, EEOC, and the Unions. The conciliation agreement was signed in January, 1974, to be effective from December 3, 1973 through December 3, 1977. The agreement was divided into several sections. Section I -- "General Provisions" -- provides, inter alia :

1. It is understood that this Agreement does not constitute an admission by the Respondents of any violation of Title VII of the Civil Rights Act of 1964, as amended.

3. The Commission agrees not to sue the Respondents over matters contained in this Agreement subject to Respondent's compliance with the promises and representations contained herein. If the Commission believes that this Agreement has been violated, it shall first attempt to resolve the dispute with the parties; then if no Agreement can be reached, the Commission can seek to enforce this Agreement through the legal process.

4. This waiver by the Commission extends to any matter which is covered by this Agreement. This does not preclude individual Charging Parties, or the Commission itself, from filing charges or suit over new matters or practices which may arise with respect to practices of the Respondents.

5. Respondents agree that all hiring and promotion practices, and any and all other conditions of employment shall be maintained and conducted in a manner which does not discriminate on the basis of race, color, creed, ancestry, religion, sex, national origin, age, place of birth, marital status or liability for services in the armed forces of the United States in violation of Title VII of the Civil Rights Act of 1964, as amended.

Section III of the conciliation agreement ("Recruitment and Hiring Practices") Paragraph 9, obligates the Company to make reasonable efforts to "recruit minorities and females into those craft areas where such jobs are to be filled by new hires, where they have heretofore been under utilized or not employed." Paragraph 10 provides that the minority group persons and female recruits for craft jobs are to be given credit for experience gained in the craft with other employers and may be considered for jobs other than those at the entry level. Paragraph 10 concludes that:

The wages, benefits, other conditions of employment and seniority date of such employee shall be determined in accordance with the provisions of the Collective Bargaining Agreement.

Section IV of the conciliation agreement is entitled "Promotion and Transfer" and establishes a special program for female and minority group Company employees who are to be given preference for promotions and transfers into vacant positions on the basis of their company seniority.*fn17 Paragraph 2 specifically provides: "For purposes of this Conciliation Agreement vacancies occasioned by layoff . . . shall not be considered as vacancies."

Section V ("Affirmative Action") establishes a five year affirmative action program designed to increase the percentage of minority group and female employees.*fn18 Among other provisions, the agreement also provides for reporting (Section IX), a modification of the maternity leave policy (Section VI) and certain payments by the Company to employees and others for past discriminatory practices. (Section VII).*fn19

The conciliation agreement has no express seniority provision nor does it expressly modify or alter the seniority provisions found in the collective bargaining agreement.*fn20 Rather, a fair reading of the conciliation agreement reveals that it is primarily concerned with the hiring, promotion and transfer of female and minority group employees.

On December 3, 1973, prior to the execution of the conciliation agreement by the Company, the Unions and EEOC, the Company and the Unions entered into a new collective bargaining agreement effective from November 1, 1973 through October 31, 1975. In pertinent part the collective bargaining agreement continues the seniority policies in operation among the bargaining unit employees of the Company.*fn21 In regard to layoffs, the collective bargaining agreement provides inter alia :

3.2. (a) All layoffs, or demotions occasioned because of falling off or curtailment of work, shall be discussed with the Union two (2) weeks in advance of the layoff and shall be made in order of seniority. No senior employee shall be laid off as long as any work which he can reasonably be expected to do is being performed by an employee junior in point of service.

3.3. Employees who have been laid off shall be reinstated to employment as need for their services arises, in the reverse order of their layoff.

3.4. Seniority is defined as length of continuous service with the Company . . ..

These provisions establish a plant-wide seniority system*fn22 for employees with respect to layoffs.*fn23

The Company in its pleadings asserts that economic considerations compelled it to announce a layoff of employees in July, 1974. The Company estimates that approximately 400 employees will have been laid off by mid-December, 1974. The Unions required strict adherence by the Company to the seniority provisions of the collective bargaining agreement. The EEOC responded to the Company's layoff plans by indicating that a layoff accomplished by seniority alone would violate the provisions of the conciliation agreement and Title VII of the Civil Rights Act of 1964.*fn24

Confronted with two apparently conflicting contracts, the Company instituted this action for declaratory judgment. At about the same time, the Company and the Unions submitted to an expedited arbitration proceeding under their collective bargaining agreement to determine if a layoff of employees in reverse order of seniority would violate the non-discrimination provision of the collective bargaining agreement.*fn25 On August 21, 1974, the arbitrator held that a layoff in accordance with the seniority provisions of the collective bargaining agreement would not violate the non-discrimination provision of the same document.*fn26

In accordance with the arbitrator's award, on August 23, 1974, the Company commenced the layoff in reverse order of seniority. Layoffs in this manner continued until September 5, 1974 when the district court issued its opinion which, as previously ...

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